Working Paper: CEPR ID: DP841
Authors: Istvan Abel; Pierre L. Siklos
Abstract: This paper demonstrates that the monetary policy of the National Bank of Hungary is restrictive and has ignored the liquidity problems raised by the overhang of inter-enterprise liquidity. The implication is that the success of the transition to market is thereby jeopardized.
Keywords: credit crunch; trade credit; east european economic transformation
JEL Codes: E51; G32; H32; P52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| restrictive monetary policy (E52) | enterprise liquidity issues (G33) |
| enterprise liquidity issues (G33) | success of transition (P27) |
| high ex post real interest rates (E43) | enterprise liquidity issues (G33) |
| inflation (E31) | nominal interest rates (E43) |
| nominal interest rates (E43) | debt servicing costs (F34) |
| debt servicing costs (F34) | firm profitability (L21) |
| liquidity issues (G33) | additional credit seeking (G51) |
| trade credit (F19) | mitigate effects of restrictive monetary policy (E52) |